In the case, there are several aspects to be taken into account in order to ensure sufficient reliability and validity. McKinnon (1988) discusses reliability and validity and these particular issues. Reliability defines the state, where the researcher can rely on the collected data. Validity is concerned with the issues, if the research contributes to the original purpose, understanding of the intended phenomenon. Furthermore, there are several threats that can alter focus from the original intended target and also impair independence of the data from the observational circumstances: (1) observer-caused effects, (2) observer bias, (3) data access limitations, and (4) complexities and limitations of the human mind. Observer-caused effects refer to situation
where the researcher deviates oneself from the natural setting, but ends up disturbing it by one's own presence. Observer bias means that such manners are applied by the observer which differ from consistent fashion. Unlike observer-caused effects, observer bias consists of researcher's selective perception and interpretation. There are three types of data access limitations. First, the researcher cannot observe, what has happened before, and what will happen after the particular observation. Second, research hosts may impose limits on access and mobility of information. Third, limitations may prevent the researcher from studying the complete phenomenon originally intended. Complexities and limitations of the human mind mean that any statements by subjects may not be taken at face value. The subject may consciously try to mislead, for example to sell more rational or acceptable image of oneself. On the other hand, purely honest subject may still be affected by human tendencies and fallibilities that prevent from giving the most truthful statements.
Practically there exists minimal observer-caused effects on the research setting for two reasons. First, data collection took place during a very short period of time, and second, during the interviews and other interactions with the case company, all operations under evaluation and examination had been conducted. Generally, there are some factors that might expose research to observer bias, but not significantly. I have been working for the case company that operates several PE funds. However, I have not been involved with any incentive schemes related to the case setting, and my regular tasks have not been related to the operations researched in this thesis.
There are several ways that have been aimed to ease data access limitations, complexities and limitations of the human mind. The primary sources of data in this research are interviews. The first interviews were held in November 2015, but the story of the PE fund dates back to the spring of 2011. As McKinnon (1988) noted, the researcher has reliable data only of the time of observation. Vaivio (2008) suggests that in order to overcome this data access limitation, interviews should be complemented with other data sources. Hence, different archived materials are being used. These materials include internal planning documentations, investor presentations and external news about the company. Not only can this material help to check facts about issues raised in interviews. Indirect or implicit aspects, such as the emphasis on certain issues in materials can be compared with the views of interviewees. In addition, the main role of triangulation in systematic combining is not that of verification. Rather, its
potential lies in enriching understanding of the case and discovering new dimensions of the research problem yet unknown to the researcher (Dubois & Gadde 2002).
However, research hosts have not imposed limits on access. All available data requested for research purposes has been given when asked. Privacy issues have been discussed in the case company. Worth clarifying is that certain pieces of information concerning exact names and sums are not available for reporting. Though, these limitations to report information do not compromise any relevant information needed to truthfully demonstrate the case in light of research questions. Complexities and limitations of the human mind that can be expected from interviews can be treated by triangulation with other material. Interviews contained a relatively extensive list of mostly open-ended questions. Limitations of human mind and time may at times result in poor answers. Therefore, interviewees have been informed with a briefing of the research, its purpose and abstract question topics. It has been reasonable for the interviewees to have time to recall the whole life cycle of the fund and structure facts concerning its development.
In addition to aforementioned reliability issues, limitations of verification and generalization are worth noting. Social science deals with abstracted concepts. Thus, no objective standards exist to be used against measurement and verification of concepts. The researcher must extract a sample from a universe of indicators and manifestations related to the concepts. Because of these two constraints, researchers in the social science can never attain perfect validity. (McKinnon 1988). Vaivio (2008) notes that qualitative research is not aiming at generalizations of a statistical nature. However, qualitative studies can arrive at theoretical generalizations (Lukka & Kasanen 1995). Furthermore, Dubois & Gadde (2002) note that there is not one single way of matching in conducting systematic combining. They remind that in deep probing case studies, theory generation and confirmation are inseparable. As the other side of the coin in this research, semi-structured and context specific interviews have poor replicability. Therefore, credibility of a theory needs to be evaluated by using other means. Pfeffer (1982) suggests judging theories according to their logical coherence. Eisenhardt (1989) recalls the need to provide the reader with suitable information in order to enable evaluating research procedure and outcomes. The essence of all research is learning, that is, the theoretical framework combined with the matching case (Dubois & Gadde 2002). Hence, substantial space in this thesis has been reserved for explaining and demonstrating the research path procedure.
4 Case and analysis
This research examines how PE investors used MCS in strategy implementation during ownership of buyout targets. Since the brief research question remains open to a set of different interpretations, it will be specified more clearly here. Notably, this examination expands scope from single target companies to a wider setting of PE investing, such as parent organizations of PE investors and their customers as major source of capital. Ownership period covers relevant life-cycle of the fund from the first perceived investment ideas through investments to exit-mode when assets were sold further. Worth noting is that the exit deal as the final point of the fund life cycle will be excluded from the analysis. The research focuses on the actual implementation of the PE fund strategy and controls into the portfolio companies. MCS of the parent investment organization as such are of minor interest, but sensitivity to them will be maintained to some extent. Since the fund strategy implementation begins with exploring and evaluating buyout targets, proper attention has been paid to these processes.
The following parts integrate case description with analysis. Aligned with the discussion in synthesis part of the framework, this case demonstrates a distinction between fund-level strategic control principles and more operational and activity-specific practices derived from it in target companies. Text parts have been structured as follows. First, basic information of the case setting will be given. Second, leaning on the insights of original judgment and other entrepreneurial topics of the framework part, the case description will continue from the subjects such as imagined business opportunities, ownership, strategy and general control principles derived from them. Third, explicit control elements of the fund and their implications in target companies will be sorted into categories of LOC. Fourth, there have been several focal activities and processes closer to operational level, that have required more task-specific guidance and control. They will be introduced as activity-specific topics. Worth noting is that not all of these MCS findings can be classified solely as operational controls. However, some even being closer to strategic level, they have been found indirectly. In order to understand factors that influence aspects and the use of MCS package at different phases, accountabilities of activities and links between strategic and task-specific controls will be examined as well.